Nov. 19 (Bloomberg) -- Barack Obama hailed Myanmar’s shift
to democracy and urged more steps to increase freedom after a
meeting with democracy advocate Aung San Suu Kyi, during the
first visit to the former military-ruled country by a U.S.
president.

“Over the last several decades, our two countries became
strangers,” he said in a speech at Yangon University in the
nation’s former capital. “But today, I can tell you that we
always remained hopeful about you -- the people of this country.
You gave us hope. And we bore witness to your courage.”

The U.S. relaxed sanctions on Myanmar this year after
President Thein Sein engaged with political opponents and eased
media restrictions following his party’s victory in a 2010
election that ended five decades of direct military rule.
Obama’s visit also reflects a legacy-building goal for a
president about to enter a second term whose early efforts at
engagement and democratization have yielded mixed results.

“When I took office as president, I sent a message to
those governments who ruled by fear,” Obama said. “I said in
my inauguration address: We will extend a hand if you are
willing to unclench your fist. And over the last year and a
half, a dramatic transition has begun, as a dictatorship of five
decades has loosened its grip.”

Well-wishers lined the streets of Yangon as Obama arrived,
taking pictures of his limousine with smart phones and iPads. He
later visited the Shwedagon Pagoda, whose 325-foot (99-meter)
tall gold-plated spire encrusted with diamonds and rubies towers
over Yangon.

‘First Steps’

“I recognize this is just the first steps on what will be
a long journey,” Obama said in a joint briefing with Thein
Sein, breaking with the U.S. practice of referring to the
country as Burma. “But we think a process of democratic and
economic reform here in Myanmar that has been begun by the
president is one that can lead to incredible development
opportunities.”

Myanmar will “redouble our efforts” to develop democracy
and “bring prosperity to our country,” Thein Sein, wearing a
purple sarong known as a longyi, said at the briefing.

Ben Rhodes, Obama’s deputy national security adviser, said
afterward that the U.S. still refers to the nation as Burma, as
does the opposition. Obama’s use of Myanmar was a “diplomatic
courtesy” in his meeting with Thein Sein.

Locals chanted “Obama, Obama” as the president met with
opposition leader Suu Kyi at the lakeside home where she spent
more than 15 years confined under house arrest. The daytime trip
to Yangon, also known as Rangoon, was sandwiched between stops
in Thailand and Cambodia, where Obama will join a regional
summit later today.

‘Mirage of Success’

Obama called Suu Kyi “an icon of democracy, who’s inspired
so many people not just in this country but all around the
world.” Suu Kyi, a Nobel Peace Prize winner whose father led
the fight for independence from Britain in the 1940s, spoke of
the “difficult years that lie ahead” for Myanmar.

“I say difficult because the most difficult time in any
transition is when we think that success is in sight,” she told
reporters from the covered terrace of her home. “Then we have
to be very careful that we are not lured by a mirage of success
and that we are working to a genuine success for our people.”

Obama praised the government for allowing protests against
the $3.6 billion Myitsone hydropower dam across the Irrawaddy
River being built with China Power Investment Corp., which Thein
Sein halted last year because it was against the “will of the
people.” He also called for civilian checks on the military,
more freedom of expression and an end to religious and racial
discrimination.

‘National Reconciliation’

Thein Sein’s government yesterday vowed to find a solution
to end violence between Rakhine Buddhists and Muslim Rohingya
that has killed about 180 people this year and displaced more
than 100,000. Many of Myanmar’s 64 million people view the
country’s 800,000 Rohingya, who are denied citizenship, as
illegal migrants from what is now Bangladesh.

“There is no excuse for violence against innocents,”
Obama said at Yangon University. “The Rohingya hold within
themselves the same dignity as you do, and I do.”

Myanmar’s government will “take decisive action to prevent
violent attacks against civilians,” according to its statement.
“It will hold accountable the perpetrators of such attacks; it
will work with the international community to meet the
humanitarian needs of the people; and it will address
contentious political dimensions, ranging from resettlement of
displaced populations to granting of citizenship.”

‘Undeserved Seal’

While Myanmar said before Obama’s visit that it granted
amnesty to 452 prisoners, the advocacy group Human Rights Watch
said an undetermined number of political prisoners remain behind
bars. Authorities released 66 more prisoners on Nov. 16,
according to a statement late yesterday from Thein Sein’s
office.

Obama’s trip “risks providing an undeserved seal of
approval to the military-dominated government that is still
violating human rights,” Brad Adams, the group’s Asia director,
said in a statement.

The decision to visit Myanmar reflects Obama’s belief that
his presence can “lock in” progress there, White House
National Security Adviser Tom Donilon said on Nov. 15. The visit
also has the backing of key Republicans in Congress.

“I want to commend him for going,” Senate Minority Leader
Mitch McConnell, a Kentucky Republican. “It is an important
step for him to take.”

The U.S. on Nov. 16 began easing a decade-long ban on
imports from Myanmar, while still blocking jadeite and rubies.
The administration is also taking initial steps to resume
military relations, through discussions about humanitarian aid
and non-lethal military ties, a senior U.S. defense official
said a day earlier.

Untapped Market

Thein Sein adviser Nay Zin Latt said in an e-mail that
Obama’s visit “will become a pull factor to attract foreign
investments from the Western world.”

Situated on the Indian Ocean between China and India,
Myanmar represents one of Asia’s last untapped frontier markets.
The nation’s economy will expand 6.2 percent this year, the
International Monetary Fund said last month.

The U.S. sees the shifting political climate in Myanmar as
an opening for new investments, exports and relations as Obama
looks to reassert power in a region increasingly reliant on
China, the world’s second-largest economy.

Chevron, Coca-Cola

The oil and gas industry accounted for 77 percent of the
$3.8 billion in foreign investment in Myanmar from 2005 to 2010.
ConocoPhillips and Chevron Corp. are scouting opportunities and
Coca-Cola Co. and PepsiCo. Inc. are returning to the country for
the first time in about 15 years. MasterCard Inc. last week
reached an agreement with a local bank to accept international
ATM cards for the first time.

Obama heads next to Phnom Penh, Cambodia, where he’ll join
meetings organized by the 10-member Association of Southeast
Asian Nations. There he’ll meet separately with leaders from
China and Japan, which have sparred over disputed islands.

“The United States of America is a Pacific nation,” Obama
said today. “We see our future as bound to those nations and
peoples to our West. As our economy recovers, this is where we
will find growth. As we end the wars that have dominated our
foreign policy for a decade, this region will be a focus of our
efforts to build a prosperous peace.”